By Ambar Warrick

-- Most Asian stocks fell on Monday as emergency liquidity measures and bank consolidations in U.S. and Europe did little to stem fears of a potential banking crisis, with markets now awaiting more cues on monetary policy from a Federal Reserve meeting this week.

Bank-heavy indexes once again saw steep losses, with Japan’s down 1%, while India’s and indexes lost 0.9% and 0.8%, respectively.

Australia’s index was also battered by losses in the country’s big four banks, which fell between 0.1% to 1.1%. Hong Kong’s index plummeted 2.6%, with HSBC Holdings PLC (HK:) down nearly 6% - the worst performer on the index. The lender had recently taken over the British arm of Silicon Valley Bank, which collapsed following a bank run earlier this month.

Chinese stocks were the sole outliers Monday, with the and indexes rising 0.1% each after the People’s Bank unexpectedly cut its for local lenders.

The PBOC also kept its unchanged at record lows, as it moves to loosen liquidity conditions and support economic growth.

Fears of a global bank crisis showed little signs of subsiding, even as the Federal Reserve and other major central banks to support beleaguered lenders. This came shortly after Swiss bank UBS Group AG (SIX:) said it will Group AG (SIX:) as the latter faces a growing liquidity crisis.

While the deal was brokered by Swiss regulators and intended to calm market fears over systemic risk to banking, it also pointed to near-term ructions in debt markets, given that UBS will write down about $17 billion worth of Credit Suisse bonds.

Asian stocks were sold off heavily last week amid fears that a bank crisis in the U.S. and Europe could spill over. Growing concerns over an economic slowdown this year also saw investors heavily avoid risk-heavy bets.

Focus this week is squarely on the conclusion of a Fed meeting on Wednesday, where the central bank is expected to . Recent ructions in the banking sector have spurred bets that the Fed will soften its hawkish tone to prevent further economic damage from high interest rates.

But recent liquidity measures also undermine the Fed’s attempts to tighten monetary policy and fight inflation over the past year, which has in turn brewed some uncertainty over how the central bank will act in its upcoming meeting.